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German Defense Ministry Demands Larger Budget in Deepening Row

German Federal Minister of Finance Olaf Scholz (SPD) holds a graph depicting annual defense spending in the federal budget from 2010 to 2022 in Berlin on May 2, 2018. Photo: EPA

In a crucial test of the unity of Chancellor Angela Merkel’s third grand coalition government, Germany’s Federal Ministry of Defense expressed its dissatisfaction with proposed federal government defense spending for the upcoming fiscal year. The Ministry demanded increased funding to modernize and to improve the combat readiness of the Bundeswehr, the German military.

Germany is a member of the North Atlantic Treaty Organization (NATO), after joining as West Germany in 1955, and as a key leader in European Union (EU) defense initiatives alongside its neighbor and fellow EU heavyweight, France. While the Bundeswehr received ample amounts of funding and equipment during the rearmament of Germany in the 1950s, ultimately becoming the backbone of NATO’s strategy for conflict in Europe during the height of the Cold War, Berlin has markedly decreased defense spending as a proportion of Germany’s gross domestic product since the end of the Cold War in 1991.

Incidents in recent years — notably German soldiers using broomsticks to substitute for their lack of heavy arms in NATO exercises in 2014 and a scandal over shoddy German-made infantry assault rifles in 2015 — reflect the presently understaffed, underfunded, and ill-equipped state of the Bundeswehr, especially in comparison to its Cold War days.

Amidst rising tensions with Russia, after the annexation of Crimea in March 2014, NATO member-states issued a declaration reaffirming a guideline for members to spend at least two percent of GDP on defense and to set 2024 as the target deadline for meeting this threshold. After the Nov. 2016 election of Donald Trump as President of the United States, he repeatedly asserted that fellow NATO allies “must finally contribute their fair share and meet their financial obligations” or risk having a diminished US presence in Europe.

However, by Feb. 2018, only 15 out of the 28 NATO countries (excluding the United States) had plans in place to meet the two percent benchmark by 2024. Germany, Europe’s largest economy, was not expected to satisfy the guideline by 2024; top US officials, including Secretary of Defense James Mattis, Secretary of State Mike Pompeo, and President Trump himself urged Berlin to ramp up defense spending to meet the target commitment.

US Secretary of Defense James Mattis (left) and German Federal Minister of Defense Ursula von der Leyen (CDU) at the Pentagon on Feb. 16, 2018. Photo: AFP

This situation is further complicated by the current composition of the German government. The government was formed after an inconclusive Sept. 2017 election and protracted negotiations, when Chancellor Merkel’s center-right Christian Democratic Union (CDU) granted the center-left (and main opponent) Social Democratic Party (SPD) control over six key ministries — including finance, foreign affairs, and justice — in order to avoid another general election. The SPD named Olaf Scholz, mayor of Hamburg and heavyweight of the SPD’s conservative wing, to the post of Finance Minister.

On May 2, Scholz presented a budget that would curb public investment from 2020 onwards and have no new debt through 2022 despite a continuing budget surplus. In a press conference on the proposed budget, Scholz noted the continual rise of German defense spending, calling it a “massive improvement” and “a turning point in the last few years.” When asked if the defense budget was influenced at all by US President Trump, Scholz merely replied, “Not at all.”

German newspaper Bild am Sonntag reported that Defense Minister Ursula von der Leyen (CDU) requested a 12 billion euro increase in the defense budget through 2021, a number double the amount set by Finance Minister Scholz. Von der Leyen joined Development Minister Gerd Mueller in warning that the proposed budget was in violation of the CDU-SPD coalition deal, which was approved in February and stated that the Bundeswehr would have to eliminate joint weapons development programs with France and to face continued combat unreadiness.

As the Bundeswehr continues to languish and Berlin prepares to join larger European defense initiatives, the issue of defense spending will undoubtedly continue to test the unity of the CDU-SPD coalition government. A compromise must be worked out by July 4, when Merkel’s Cabinet will present a longer-term spending proposal to the Bundestag for 2019.